Infosys shares opened sharply lower on Thursday, falling 1.40% or ₹17.40 to ₹1,223.20 on the NSE as of 9:17 AM IST on April 24, hitting a fresh 52-week low of ₹1,199 in early trade — the worst level the stock has seen in the past year — as investors digested a Q4 FY26 print that missed on constant currency revenue growth sequentially and delivered FY27 guidance that has divided the analyst community. Market capitalisation stands at ₹5.02 lakh crore with the stock trading at a PE of 17.89 and a dividend yield of 3.72%. The year range of ₹1,199 to ₹1,728 illustrates how far the stock has fallen from its peak, with today’s low touching the bottom of that entire annual range.
What the Q4 FY26 Numbers Actually Said
The headline numbers from Q4 FY26 were superficially strong — PAT surged 20.90% year-on-year to ₹8,509 crore, revenue grew 13.38% to ₹46,402 crore, and EPS jumped 23.8% year-on-year to ₹21.01. But the market is not selling the year-on-year story. It is selling the sequential constant currency story and the forward guidance.
Constant currency revenue fell 1.3% quarter-on-quarter — below the already-conservative estimate of a 0.7% QoQ decline. The reported 2.03% sequential revenue growth was entirely a currency translation benefit. Strip that out and the business delivered less revenue in Q4 than in Q3 in real terms. IFRS operating margin came in at 21% — marginally below the estimate of 21.2%. Adj. EBIT rose 16.6% QoQ and 13.6% YoY to ₹97 billion against an estimate of ₹98 billion — a near-miss. Large deal TCV of $3.2 billion fell 33.3% quarter-on-quarter with a book-to-bill ratio of just 0.6. Total headcount fell by 8,440 employees sequentially to 328,594 from 337,034. Net-new deal wins declined 19% year-on-year. Management commentary noted slower client decision-making in March and high competitive intensity.
The FY27 Guidance — Why Markets Are Disappointed
Revenue growth guidance of 1.5% to 3.5% in constant currency with an operating margin band of 20%-22% is the number that drove the gap-down opening. The guidance midpoint of 2.5% constant currency growth is below the market’s expectation of closer to 3-4% heading into the year, and the operating margin band — while consistent with the IFRS margin reported in Q4 — represents a step-down from the EBITDA-based 24% margin the company had been delivering. The guidance also includes approximately 25 basis points of contribution from the Stratus acquisition, meaning organic constant currency growth guidance is even lower at the midpoint.
The guidance incorporates a known headwind — the ramp-down of a large European auto client that will impact revenues by approximately 1% in FY27, with three quarters of that impact carrying into FY28 as well. Management flagged AI-driven productivity demands from clients as a structural headwind to revenue realisation even as it creates new service opportunities.
What the Analysts Said
The street is split sharply. Nomura is Buy at ₹1,640, expecting 3.4% USD revenue growth in FY27 and stable 21% margins, with better prospects in BFSI and EURS verticals. HSBC is Buy at ₹1,585, noting the stock is near a five-year low despite 50% EPS growth over the period. MOSL is Buy at ₹1,425 despite calling the road ahead tough.
Citi cut its target to ₹1,300 and is Neutral, citing the CC sequential miss and management’s admission of slower decision-making and high competitive intensity. Jefferies holds at ₹1,235 with a Hold rating, pointing to the headcount decline and net-new deal weakness as key disappointments. DAM Capital downgraded to Neutral at ₹1,300, flagging the European auto client ramp-down as a multi-year drag and estimating organic CC growth of just 2.8-3%.
The Valuation Reality at ₹1,199-₹1,223
At ₹1,223 with a PE of 17.89 and a dividend yield of 3.72%, Infosys is trading at levels that the bulls — Nomura, HSBC, MOSL — argue represent significant undervaluation relative to the company’s earnings growth track record and the 7% recurring EPS CAGR that Jefferies estimates even in a bear case. Nomura’s 15x FY27 EPS of ₹82 calculation implies significant upside from current levels if the guidance midpoint is delivered.
The bears — Citi, Jefferies, DAM Capital — counter that the weak guidance midpoint, the CC sequential miss, the headcount decline and the large deal TCV drop together suggest the earnings growth trajectory is deteriorating in a way that makes the current PE difficult to defend without a meaningful improvement in forward indicators.
The 3.72% dividend yield — with a ₹25 per share final dividend proposed — is the floor argument. Jefferies specifically cited the 4% dividend yield as a downside cap. At current levels, Infosys offers more dividend yield than most IT peers, which limits how much further the stock can fall on fundamentals alone.
The 52-week low of ₹1,199 touched in early trade today is the technical reference. Whether that holds or breaks through the Thursday session will determine the short-term market verdict on whether the guide-down has been fully priced in.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to consult a SEBI-registered financial advisor before making investment decisions. Stock prices are indicative and subject to change.